What of the following is true of the rule of perfection by possession of collateral?
A)A creditor cannot take possession of the collateral until a financing statement is filed.
B)No financing statement has to be filed if the creditor has physical possession of the collateral.
C)A debtor cannot acquire security against the collateral without filing a financing statement.
D)A financing statement can be filed only against intangible personal property placed as collateral.

Question

Quizplus · Accepted Answer

According to the rule of perfection by possession of collateral, the creditor can perfect their security interest without filing a financing statement if they have physical possession of the collateral. Therefore, option B is true. Option A is incorrect because possession does not depend on filing a financing statement. Option C is incorrect because it is the debtor who has to file a financing statement to provide notice of their security interest against the collateral. Option D is incorrect because financing statements can be filed against both tangible and intangible personal property.

What of the Following Is True of the Rule of Perfection